The Fed’s Impact on Gold & Energy Market
let’s dive into some of the fundamentals
here and what’s behind some of the price
activity we’re looking at and the
balance here Dan Cook joins us Chief
strategy officer Apex trade Trader
funding Dan good to have you with us uh
let’s talk a little bit about balance
right in your notes I noticed that you
referenced that in terms of crude price
you said it’s not supply and demand but
you say Supply and shock can you explain
that yeah certainly and thank you uh uh
good morning Ben thank you for having me
on uh typically and since since grammar
school we’ve all grown up with uh
thinking Commodities it’s all supply and
demand and and typically that would be
the case in a normal Market I think if
if you simply look at the supply side
there’s really more of a bearish case
than anything for crude oil uh we’ve got
as you mentioned strong uh us
inventories uh we’ve got a pretty key
OPAC meeting coming up and OPAC is
really in the driver’s seat uh in regard
to they have a lot of U uh capacity just
sitting on the shelf the highest in 15
years with exception to a brief in 2020
we all know what that errow is about but
where the shot comes in and it’s really
more on the geopolitical side as we’ve
discussed one some of the price action
we saw last week where there are some
shock absorbers in that we saw a quick
Spike after the drone strikes and
minutes later all of a sudden we’re
right back down at the levels so there
does seem to be kind of a shock absorber
type system with the supply and then
sort of a normalization I guess of
geopolitical risk where I think the
shock could come in so far this
geopolitical risk hasn’t really hurt the
supply side of oil and if we start to
see that interrupt flows um any type of
actions that start hitting refineries
things like that hit at the core as a
Trader I always want to be able to gauge
my risk I love the technical levels but
as we all know sometimes things happen
that’ll blow through those levels and uh
I noticed the numbers on your charts
they’re very similar to what I have
barring any type of geopolitical iCal
risk um as far as a major um something
that would really impact the flow of oil
I’m kind of looking at a floor I think I
think we probably drop a little bit
lower if we don’t hold here to around
the 78 7850 okay with a top side of
about 88 to
8850 78 to 88 let’s talk about that a
little bit more in just a second but I
want to kind of just expand on those
thoughts a little bit because uh I
always point out to our viewers right
when you trade these products and you
just made it very clear I think it’s
important
that you’re susceptible these headline
wrists we remember from back in October
of last year when the war broke out and
the situation with Israel uh we talked
about Iran’s involvement right we talked
about supplies and if they got involved
and it seems like they did over the last
couple weeks but now found a bit of an
offramp which everybody’s kind of
cheering on we’re seeing price reflect
that but I wanted to just get your
thoughts here because they’re still at
stubbornly elevated levels right at this
$85 8182 level here right now holding on
to just below 85 and as you check AAA is
reporting national average for a gallon
gas still at stubbornly elevated levels
as well 366 according to AAA last week
364 last month 353 I mean we’ve been
trending higher
still yeah and you know that’s the thing
I think it’s uh we’ve got some
geopolitical risk already priced in and
that’s probably part of the shock absorb
there’s probably eight to10 dos I would
guess okay um based on some you know
rough math that I do we’ve got about
1888 to10 of geopolitical risk I don’t
see demand we’ve got gas prices as we
get into the summer season for most of
the northern hemisphere um I don’t see a
lot of consumer demand coming from this
we’ve got some uptick in manufacturing
I’m not just seeing a demand driver at
all to keep it at these elevated levels
and so I’ve got to go to the
geopolitical side and yeah we had that
shock absorber um and maybe we’re all
kind of getting normalized to some of
these risks but from a trading
perspective um when I can’t Define what
or when that is um it’s very difficult
for me to take a strong uh short
position here particularly when I think
we’re we’re at and uh could be
approaching even another key level
around that February High even when you
look at this chart here if we could just
pull this back up again I mean look
where we are we’re basically in the
middle of the range that we established
over the last year so there’s not a lot
of conviction one way or the other not a
lot of like real lean if you’re a trend
follower like what we uh Focus here on
the show quite a bit on talk to us a
little bit about your best case your
bull scenario here that’s playing out or
or what you look for for in case of a
bull situation to play
out in a bull situation I I think we I
think we find support either very near
where we’re at currently or within or
within a couple of a couple of bucks I
think in the next um right now which
probably wouldn’t be terrible on a
bullish case is we get some
consolidation uh over the next few weeks
and again that’s barring any any major
shocks as we head into that summer
season we’ve got some uh you know some
obviously key data throughout the uh
throughout the uh upcoming months I’m
really looking forward to that uh OPEC
meeting though I think that’s going to
be a key driver that more in the midterm
now again day-to-day there’s going to be
opportunities to long and short side but
if I’m building a a bar a bullish case
here I’m looking for some consolidation
and really finding a floor around those
February highs talk to us a little bit
about that be case and some of those
short opportunities you just
mentioned yeah um again you want to be
very cautious uh these are not positions
you want to put on and walk away from uh
particularly overnight uh on the on the
retail side I know our larger funds that
are watching are going to be saying well
we have to hold this we have to keep our
portfolios in there but uh strictly on
the retail side uh it is really a matter
of put your position on I think there is
a bearish case in OPEC but again I’m not
overly I don’t think there’s a lot of uh
uh of uh risk uh or reward to risk in
this ratio I think you’re getting to a
level right now in the next few days
here where there’s going to be more risk
I don’t see anything to drive a big
breakdown uh unless you’re simply day
trading it and looking for you know a
buck buck 50 move Dan let’s shift gears
a little bit here talk about gold while
we still have a couple minutes and I
wanted to get your thoughts because uh
it looks like per your notes you feel
like that runup was things were a little
bit
overdone yeah and we we see that in
markets all the time emotions I’m not
comparing it to you know the Tulip uh
craze but uh when it’s looked at as an
inflation hedge and I think it it really
was as well as again we get that safe
haven type um the world is going to end
let’s grab gold type of mentality and
that can only run so far uh really
getting up around the 2400 did seem a
bit excessive that said I’m not
expecting a a a a long-term massive drop
I do think we find some footing probably
around the 2200 level so I think we have
a little ways uh to kind of peel off the
top a little bit and then look from
there we we can’t really see a lot more
at these levels I don’t believe
rebalancing into portfolios um that are
going to be wanting to hold a lot of
gold and so kind of a natural pullback
rather than a correction I would say in
this case and again kind of looking
around the 2200 level Dan I like the way
you approach uh uh looking at Price
activity and uh the areas that you have
your eye on again as you mentioned in
terms of crude they’re very similar to
what we’re looking at here uh uh but I
wanted to kind of um just add a thought
on here if you could first time on the
future show figure we get you on record
here a lot of speculation associated
with the FED in terms of rate cuts when
how many what are your thoughts and what
are you looking for I’m going to go
straight back to my previous comment
that emotions get overrun um I was not
in the camp of the early of the year
five to six R Cuts I do think as we get
towards the end of the year but again
it’s a wait and see they really
shouldn’t be in a rush we’ve got some
indicators at saying there shouldn’t be
any cuts at all at least for the time
being again I’m going to play it dayto
day uh I’m going to go on record um I
think if we have any Cuts we’ll see them
towards the end of the year and not
before then um I don’t think we’re in
any position to really cut we’re still
still seeing very some sticky inflation
uh here um I think one of the things and
and you mentioned on your previous guest
one of the things I’m really watching
this week uh are those treasury auctions
I think uh that’s going to be a huge
driver lastly how much you watching the
dollar right because we often times talk
about how is an in influential Factor
when you’re talking about Commodities
like crude and gold
it it’s it’s it’s absolutely influential
there’s two sides really to every trade
right if you’re if you’re buying oil
you’re typically uh Le the states you’re
using US dollars to do that so you’ve
got to pay there is a correlation there
you’re giving up one to buy the other at
all times similarly with gold and so
you’ve got to keep an eye on the on the
dollar Index and see we’re we’re we’ve
been around that 106 level so we’ll see
where we go from here and again I think
we’re going to get a good indication I
I’ve really got my eye on those two year
notes Dan I appreciate you joining us I
appreciate you sharing part of your
Tuesday morning with us and look forward
to having you back at some point
hopefully to discuss these levels and uh
continue this conversation Dan Cook
Chief strategy officer at Apex Trader
funding
It’s a balancing act of supply and shock, notes Dan Cook on the outlook for oil. He discusses key factors influencing energy prices, as well as the bullish and bearish case for oil prices. He also talks about gold’s outlook after its rally to all-time highs. He then looks at the Fed’s impact on the gold an energy market. Tune in to find out more about the stock market today.
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